In 1907, an arbitration court judge decided that wages at a Melbourne factory should be based on the cost of living for a worker and his family. From then on, Australia’s minimum wage was based on what was fair and reasonable rather than what the employer was offering.
The decision was made in the Commonwealth Court of Conciliation and Arbitration, just a few years after Federation in 1901 as the laws of the new nation were being developed.
Justice Higgins, the judge on the case, decided that the test of a fair and reasonable wage was ‘the normal needs of the average employee regarded as a human being living in a civilized community’. He also said that the pay of the employee should not be dependent on the profits of the employer.
Out of hundreds of business operating in Melbourne, Justice Higgins chose to focus on the Sunshine Harvester Company because it was a large employer with a great number and variety of employees.
The Sunshine Harvester Company was owned by H. V. McKay, a successful employer, innovator and community leader producing the high-tech machine of the age – the combine harvester.
Employees at Sunshine Harvester were represented by many trade unions, including the Agricultural Implement Makers’ Society, the Amalgamated Iron-Moulders , the Timber Smiths and Iron-Workers’ Society , the Coach Builders and Wheelwrights’ Society, and the Certificated Engine-Drivers.
In 1907, the Harvester Judgement set a minimum wage for unskilled labourers of 2 pounds, 2 shillings per week the amount an average worker paid for food, shelter and clothing – for him and his family.
Postscript: By the 1920s the H.V. McKay Company was the largest implement factory in the southern hemisphere, covering 75 acres. It was leading the international agricultural industry with the world’s first self-propelled harvester. Various mergers and acquisitions followed leading to ownership by Canadian / US firm Massey Ferguson. The Melbourne suburb of Sunshine is named after the company.